7.13 Recap: The “Requiem” of the old cycle, and victory from being in cash (no position)

This drop today is a bit extreme—clearly a “double kill” situation for both longs and shorts. Quant trading really is a rhythm of self-destruction; [TaoBao]
I’ve been coughing so badly these days that my condition isn’t light. Turns out I found the overall market is even worse off than I am. I hope that fans who saw the reminder in the pre-market will leave today mostly in the red; and if there are fans who still managed to make money from today’s chart, come out and say hi!!
Today, I’ll give an analysis of theme directions once more, because at this stage it’s pointless. Tech’s internal chips are rapidly loosening, and at the same time there isn’t any sector at the bottom that can step in to absorb capital;
So it’s like in the movie—what Crow Brother said: if you can’t get through it, then none of you should get through it either!

First, the core judgment: long turns to short, stay in cash and wait.
After reviewing yesterday’s weekend recap, seeing “repair” and “stabilization” all over the place, I actually felt an inexplicable unease in my heart. In terms of technical structure, the old cycle’s pullback/retreat signal is too obvious, while the players in the new cycle still refuse to take over the baton. What the chart shows today isn’t “repair”—it’s a “funeral hymn,” the last song burying the entire old cycle.
Before the open, my anchoring for myself was simple: the SSE Composite Index at 3,938.88 points. This is the longs’ lifeline defined in my 7.10 recap. If it doesn’t break, everything can still be discussed; if it breaks, mud and sand will be swept away and the short-side situation is declared. Today, this line was effortlessly pierced right in the opening moments. The signal is clear, and the structure has changed.

I. Sentiment confirmation: the confession of the “nuclear button” at the open
My trading direction has always been tech. This morning, our steadfast pillar—DuofuoDuo, Eson—got directly pressed down onto the limit-down board, completely cooled off. In the world of signal flows, this is the most straightforward announcement: today belongs to an extreme emotional ice point—not a repair day, but a clearing-out day.
In yesterday’s recap, the core “tech souls” I was most concerned about gave me the answer right at the open:

Langchao Information (computing power, sentiment core): missed expectations at the open. This was the flag of “opening 10 billion to cap it” mentioned in my 7.08 recap—today, the flag fell.

Tsinghua Unisplendour: although intraday funds once hard-pushed it to try to play the “surviving remnant,” it was only a struggle at the end of its strength. Under the overall suppression of sentiment, it surged and then fell back.

Huawei line (like Gaiqiong Electronics, HuaDa Jiutian): this is the only fig leaf for today’s tech direction.
Whether it’s designed HuaDa Jiutian or Gaiqiong Electronics, they truly managed to take on the last stubborn strength,
giving an “escape point” for the chips you entered yesterday. But remember—this is an escape, not an attack.
If your core stock in this kind of situation can still give you a breakeven, or even an exit opportunity after a higher move,
then silently tell yourself “I concede,” and decisively leave. This is the last shred of dignity the market offers in the remaining old-cycle aftermath.
Hesitation means being the prisoner who makes the final surrender.

II. Chart breakdown: the most extreme “double kill” for both longs and shorts

Early today I said internally: when it rises, you should get out—don’t cling to greed.
But in reality today’s chart was even more extreme than my prediction, because it played out the classic “double kill”:
panic selling right after the open.
After the index and individual stocks gapped down, dip-buying funds (some mindlessly quant) entered, trying to repair.
After the repair pushed up, it was hit by an even more violent sell order reversing to smash down—chasing funds were buried instantly.
Late in the session, it turned to even more desperate selling.
Afterward I reviewed and linked the whole day. The most critical variable came externally: the Korean stock market today got brutally hammered by the shorts, falling terribly. This directly affected sentiment in areas on our side with “Korea-related attributes,” like storage and optical communications.
Even more fatal is the collapse of belief. In 7.02 and 7.03, that kind of repair—along with quant funds under homogeneous algorithmic driving—could force the index back. But when a quant system finds that its companions are all running, and there is no new capital to take the deck, then its underlying rules change from “trigger buy” to “trigger all sell.” When every program points to selling, the market will kill on all fronts—people kill dogs, dogs bite people, and in the end none escapes.

III. Technical structure: a lurking M-top, and the adjustment won’t end in a single day

From the index pattern, whether it’s the SSE or STAR Market 50, what they currently show is a standard but ugly double-top (M-top) structure. This was already anticipated in my 7.07 recap.
In the early stage of a selloff, this kind of structure often comes with rapid, resistance-free selling. To go long, you need extremely strong funds and time to digest that massive amount of trapped overhead at the top. My personal view is that to suddenly lift off from this position, you’d need either a super external tailwind or an extreme technical breakdown (like today’s gap-down selloff). Otherwise, the adjustment time span will be stretched long.
If over the next few days the chart doesn’t show that kind of panic-buying point—gap down, then massive funds quickly refill—our entry’s cost-effectiveness will be extremely low. If you chase from the right side, you buy in the “downward continuation.” If you dip-buy from the left side, you’ll get buried next.

IV. Tomorrow’s scenarios and strategy
Core strategy: stay in cash, mainly watch and wait.
Most likely (50%): tomorrow continues the momentum of selling in inertia, but the drop will be smaller than today. The index will show weak resistance near the previous low, but that’s not a buy point—it’s for continued observation. The best is to wait for a slow bleed down.
Neutral (30%): tomorrow shows a very small-scale, reduced-volume repair. Remember, in the early phase of an exit/wave of de-risking, any no-volume repair is “fellow countryman, don’t go”—it’s for distributing shares, not for value-dip buying.
Low probability (20%): tomorrow directly reverses in a V-shape. If such an extreme case occurs, it must be the weighted financial sector lifting the index, while the tech direction continues to be a bloodbath. This kind of “make money on the index but not on the stocks”行情 isn’t for me to participate in.
Trading plan:

1. Don’t look at “oversold rebounds” from any old-cycle opportunities. That’s playing with fire.
2. Don’t look at themes, earnings, or logic. In the early phase of an exit wave, below the waterline there’s no real substance.
3. Continue staying in cash—hands in pockets, control your hands—wait until the chart shows the three-layer signals we need: “despairing sentiment + bottom massive turnover + a super core surviving remnant.”
   Remember this: every cent you save while prices are falling is ammunition for your future offensive. Keep the bullets, and when the next correct trigger happens, you’ll have the right to aim at it.
   As for theme directions, I personally will keep watching: Huawei’s “Taoding law,” whether medicine keeps expanding in volume, today’s commercial aerospace that got slaughtered (I finally understand why there’s a logic of long-term expectations); robotics—I can’t see it for now;**
   (Do you remember what I said about the logic of risk-asset repricing from the risk-free interest rate? These days, global stock markets are all playing out these major effects. Of course, since I focus on trading stocks, I only need to manage the microstructure.)
   Outside the window, all is noise; within the node, you see the real truth.
   Only by holding onto solitude can you wait for the prosperity to arrive.